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Customer Inter@ction Solutions
March 2007 - Volume 25 / Number 10
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Merger Mania Has Created Vigorous New Business Opportunities For SMBs

By: Nadji Tehrani
Founder, Chairman & CEO, Editor-in-Chief


In the last several years, there have been approximately 33 notable mergers and acquisitions in the contact center industry and, to the best of our knowledge, most of these have been successful business propositions.

As indicated in previous editorials, mergers and acquisitions are successful when, and only when, one plus one equals three. In other words, strategic acquisitions are most likely to be successful provided the original founders, entrepreneurs and management team remain intact and bring their expertise to the parent company. Unfortunately, in most Every call center manager would like a vendor that can provide them products and services that are better, faster and cheaper. cases and for a variety of reasons, the founding entrepreneur, along with important senior management members, are separated from the venture, and therein lies the source of many problems and subsequent failures of mergers, resulting in one plus one equaling zero.

The failure of a significant portion of M&As (mergers and acquisitions) in general can be attributed to several factors, among them the following:

1. Lack of cultural compatibility between companies;
2. Clash of egos; and
3. Divergent business philosophies, among many other things.

Having said the above, to the best of our knowledge, the success rate for mergers and acquisitions in the technology sector has been far higher than for those in the teleservices industry. The reason for them are beyond the scope of this editorial.
As indicated above, there have been approximately 33 transactions in the contact center industry (see Table 1) in the last several years. We believe consolidation of this type can be extremely helpful to the industry provided the actual needs of contact center management and operations are considered to be the highest priority. We wish all of them success and we hope that all of them will be successful mergers.

Table 1.
Call Center Mergers And Acquisitions Winners

CenterForce Solutions
(acquired by Concerto, 2004)

SmallWonder! Softworks Inc.
(acquired by Melita, 1999)

eShare Technologies Inc.
(acquired by divine, inc., 2001)

Quintus Corp.
(acquired by Avaya (News - Alert) , 2001)

(acquired by Oracle, 2005)

Syntellect (News - Alert) Inc.
(acquired by Enghouse Systems Ltd., 2002)

Digisoft Computers
(acquired by TouchStar Software, 2005)

(acquired by Syntellect, 2005)

Clarify, Inc.
(acquired by Nortel (News - Alert) , 1999)

Thales Contact Solutions/RACAL Recorders
(acquired by NICE, 2003)

(acquired by ClientLogic 2006)

(acquired by Onex Corporation, 1998)

Genesys Telecommunications Laboratories
(acquired by Alcatel (News - Alert) , 1999)

(acquired by Genesys Telecommunications Laboratories/Alacatel, 2002)

Advanced DataComm
(acquired by Working Solutions, 2006)

West Coporation
(acquired by Thomas H Lee Partners, 2006)

FrontRange Solutions Inc.
(acquired by Francisco Partners, 2005)

(acquired by Oracle (News - Alert) , 2005)

(acquired by Oracle, 2006)

Performix Technologies
(acquired by NICE Systems (News - Alert) , 2006)

IEX Corp.
(acquired by NICE Systems, 2006)

Nuasis Corp.
(acquired by Intervoice (News - Alert) , 2006)

Aspect Communications
(acquired by Concerto, 2005)

Rockwell FirstPoint Commerce
(acquired by Aspect, 2004)

(acquired by Davox/Concerto

(acquired by Nuance (News - Alert) , 2006)

(acquired by Verint, 2006)

The Opus Group
(acquired by Verint, 2005)

Amae Software
(acquired by Witness, 2006)

Witness Systems (News - Alert)
(acquired by Verint, 2007,
pending approvals)

Blue Pumpkin
(acquired by Witness Systems,

(acquired by Autonomy, 2005)

Dakotah Direct
(acquired by West Corp. (News - Alert) in 2002)

Powerful New Business Opportunities For Small Businesses
Every time a major consolidation takes place, in my judgment, many new opportunities become available for small businesses. In this editorial, I intend to review several of these opportunities and explain how an entrepreneur can go about taking advantage of them.

These opportunities and the success of the SMBs (small to medium-sized businesses) are usually enhanced because of the following reasons:

1. Small, Profitable Niches are Often Ignored by Large Conglomerates.
Not only is this true, but also larger conglomerates will simply not consider small niches of opportunities. For that reason, a new door of As we all know, the
days of one-size-fits-all
and off-the-shelf
solutions are long gone.
opportunity is open to entrepreneurs to come in and fulfill the needs created by those ignored niches.

2. Speed.
As we all know, every consumer and every call center manager would like a vendor that can provide them products and services that are better, faster and cheaper. Usually, these criteria can be best met by smaller companies that can literally turn on a dime.

3. Adaptation of Service.
Small entrepreneurial companies will succeed when they are able to adapt their services to the customer’s needs. As we all know, the days of one-size-fits-all and off-the-shelf solutions are long gone. Today, customers want solutions that are tailor-made to their needs and backed by quality, flexible service.

4. Tailor-Made Solutions for SMBs.
Following the above comment, new SMBs can become successful provided they focus strictly on tailor-made solutions that will answer customers’ specific needs.

5. The Key to Success.
The key to success in this age of merger mania is for the entrepreneur to find new areas of needs in the call center, then develop software and/or services to address those needs.

6. Small Niches Can Be Profitable.
It is a known fact that small niches are usually very profitable due to a lack of major competition. And, if you are really providing an excellent service and excellent product, you can charge a significant price and, thereby, create a very healthy profit margin.
While a niche by itself, by definition, is a small sector of a business, its profitability justifies its existence. However, to make it big in the small niche environment, you need to develop several niches and try to make most, if not all of them, successful, then your profitability could be substantially higher than that of the average large provider.

Congratulations To the Top 50 Outbound Teleservices Agencies

As the industry’s leading publication since 1982, it is our distinct honor to congratulate all the companies in the 22nd Annual Top 50 Teleservices Agencies Ranking (outbound). By becoming a Top 50 Teleservices Agency, you have distinguished your company as one of the very best in the outsourced teleservices, customer care/CRM industry. Be sure to inform your customers and prospects of this great news, for awards without marketing and differentiation are wasted! Please read my Publisher’s Outlook titled “Award Marketing” at www.tmcnet.com/cis/0203/0203po.htm.

Small, Profitable Niches are Often Ignored by Large Conglomerates. 7. The Call Center Industry is Doing Well and That Should Help Entrepreneurs.
As I stated in my January 2007 editorial, the contact center/CRM industry continues to enjoy tremendous growth and profitability against all odds and the fact that it is a relatively mature industry now. What this means is that there is more reason and more
room for new entrepreneurs to develop hot new applications and claim major market share in the fast-growing contact center industry.

Good luck and best wishes.

As always, I welcome your comments. Please e-mail them to me at [email protected]. CIS

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For information and subscriptions, visit www.TMCnet.com or call 203-852-6800.

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